Britain is "dangerously" exposed to China for the critical minerals its defence, renewable energy and artificial intelligence programmes depend on, a parliamentary investigation has found, and its MPs have called for an urgent centralised policy and a new "critical minerals finance facility" to fund mines and diversify supply.
China dominates the world's supply of rare earths and other critical minerals, and of the refined byproducts used in everything from military jets and car-locking systems to fridges and washing machines. The business select committee heard that the processing stage was where the bottlenecks were, with China dominating the refining of seven categories of minerals, including refined lithium for electric vehicles and the rare earths used in the fuselage and wings of military aircraft.
Its chair, Liam Byrne, said: "Critical minerals are the alpha of the new economy. We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on. Yet 16 years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed." It is the second time in a week that Byrne's committee has criticised government policy on China.
MPs were told that demand for lithium alone would rise 45-fold between now and 2030, and that demand for rare earths for permanent magnets in military jets and other applications would rise 16-fold over the same period as Britain seeks to rebuild its military capabilities. China has shown it can suddenly turn off rare earth supplies, as it did in 2025, and the committee said the UK was not putting enough effort into finding alternatives. The EU, the US and other countries faced the same risk of rare earth supplies being cut off by China; separate restrictions on legacy chips after a row over a Dutch intervention in the China-owned Nexperia left the European car industry “days away” from stoppages last October.
The report notes that Donald Trump secured a one-year reprieve on global export restrictions on rare earths from Xi Jinping in October last year, extended to January 2027 after the Chinese president's visit to Washington. The reprieve means the UK is at the mercy of US-China relations, the report suggests. The most "realistic" solution was for Britain to work with G7 partners, the rest of Europe and Indo-Pacific countries to "aggregate demand" and bring in new suppliers.
The committee said its investigation was frustrated by the government's lack of transparency. “Parliament has no visibility of the capabilities the government is seeking to protect, the vulnerabilities it has identified, or the projects it is backing to reduce risk,” it said. Its 10-point plan covers identifying domestic mining, refining and recycling opportunities and their costs, a strategy to encourage business to reduce procurement from China, unlocking investment and reviewing planning and permitting rules that may block mining. The committee said it could not be confident the government could satisfy any of its 10 tests, concluding that “the UK requires new institutional and financial muscle”.
A government spokesperson denied that the UK lacks a critical minerals strategy, saying it was delivering £400m "to ramp up domestic production and recycling" and to forge new international partnerships. "Our strategy also sets clear goals for 2035, including meeting 10% of demand through domestic production and 20% through recycling, with no more than 60% of any critical minerals coming from any single country," they added.
Analysis
Why This Matters
- The committee ties mineral supply directly to three national priorities: rearming Britain, building AI and delivering net zero, making the dependency a test of industrial strategy rather than a niche trade issue.
- Demand for lithium is forecast to rise 45-fold and for rare earths 16-fold by 2030, so the exposure deepens quickly even as the government searches for alternatives.
- The extended US-China reprieve on rare earth export restrictions runs to January 2027, leaving UK supply partly dependent on the state of relations between Washington and Beijing.
Background
China holds a stranglehold on the world's supply of rare earths and other critical minerals, and on the refining of them, giving it leverage over products from military jets to consumer appliances. It demonstrated that leverage by cutting off rare earth supplies in 2025. The EU and the US face the same risk of being cut off, and the UK committee is the latest Western body pressing for diversification.
Key Perspectives
Business and Trade Select Committee: says Britain remains dangerously exposed 16 years after China first weaponised its rare earths advantage, and needs a centralised policy, a critical minerals finance facility and demand-aggregation partnerships with G7, European and Indo-Pacific allies.
UK government: denies lacking a critical minerals strategy, pointing to £400m for domestic production and recycling, and to 2035 goals of 10% domestic production, 20% recycling and no more than 60% of any critical mineral from a single country.
What to Watch
- Whether the government responds to the committee's 10-point plan and publishes the capabilities, vulnerabilities and projects the committee says parliament cannot see.
- The January 2027 expiry of the extended export reprieve, after which UK access to rare earths could again depend on US-China relations.
- Whether the proposed critical minerals finance facility and talks with G7, Europe and Indo-Pacific partners yield investment in new mines, refineries or recycling capacity.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedA parliamentary investigation found that the UK is “dangerously” reliant on China for critical minerals needed for defence and AI.Business | The Guardian: “The UK is “dangerously” dependent on China for critical raw materials needed for the military, renewable energy infrastructure and AI, a parliamentary investigation has found.”
- SupportedThe business select committee called for an urgent centralised policy and a new critical minerals finance facility.Business | The Guardian: “MPs on the business select committee called for an urgent centralised policy and the creation of a “critical minerals finance facility””
- SupportedCommittee chair Liam Byrne said: “Critical minerals are the alpha of the new economy. We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on. Yet 16 years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed.”Business | The Guardian: ““Critical minerals are the alpha of the new economy,” said the committee’s chair, Liam Byrne. “We cannot rearm Britain, build AI or deliver net zero unless we secure the minerals these technologies depend on. “Yet 16 years after China first weaponised its chokehold over rare earths, Britain remains dangerously exposed.””
- SupportedDemand for lithium is expected to rise 45-fold between now and 2030.Business | The Guardian: “MPs were told that demand for lithium alone would increase 45-fold between now and 2030”
- SupportedDemand for rare earths used in permanent magnets is expected to rise 16-fold over the same period.Business | The Guardian: “The demand for rare earths needed for permanent magnets used in military jets and other applications would rise 16-fold in the same period”
- SupportedChina dominates the refining of seven categories of minerals, including lithium and rare earths used in military aircraft.Business | The Guardian: “with China dominating the refining of seven categories of minerals, including refined lithium needed for electric vehicles and rare earths used in the fuselage and wings of military aircraft”
- SupportedChina can suddenly turn off rare earth supplies, as it did in 2025.Business | The Guardian: “But with China capable of suddenly turning off rare earth supplies, as it did in 2025”
- SupportedRestrictions on legacy chips after a row over Dutch intervention in Nexperia left the European car industry “days away” from stoppages last October.Business | The Guardian: “Separate restrictions on legacy chips after a row over a Dutch intervention in the China-owned Nexperia left the European car industry “days away” from stoppages last October.”
- SupportedDonald Trump secured a one-year reprieve on global rare-earth export restrictions from Xi Jinping in October last year, and it was extended to January 2027 after the Chinese president’s visit to Washington.Business | The Guardian: “Donald Trump secured a one-year reprieve on global export restrictions on rare earths from Xi Jinping in October last year. This was extended to January 2027 after the Chinese president’s recent visit to Washington.”
- SupportedThe committee said the investigation was frustrated by the government’s lack of transparency and that Parliament had no visibility of protected capabilities, identified vulnerabilities or risk-reduction projects.Business | The Guardian: “The committee said its investigation was frustrated by lack of transparency by the government. “Parliament has no visibility of the capabilities the government is seeking to protect, the vulnerabilities it has identified, or the projects it is backing to reduce risk,” it said.”
- SupportedA government spokesperson said the UK was delivering £400m to ramp up domestic production and recycling and forge international partnerships.Business | The Guardian: “A government spokesperson denied it did not have a critical minerals strategy saying it was delivering £400m “to ramp up domestic production and recycling” and forge new international partnerships.”
- SupportedThe spokesperson said the strategy’s 2035 goals include meeting 10% of demand through domestic production, 20% through recycling, and limiting any single country to no more than 60% of any critical mineral supply.Business | The Guardian: ““Our strategy also sets clear goals for 2035, including meeting 10% of demand through domestic production and 20% through recycling, with no more than 60% of any critical minerals coming from any single country,” they added.”